Obama jumps to the left, Gillard steps to the right

24 July 2010

Professor Geoffrey Garrett

Dean, The Wharton School of the University of Pennsylvania

Sydney Morning Herald

By Geoffrey Garrett

It is often said Australian Labor stands well to the left of America's Democrats. You wouldn't know it in the run-up to elections in both countries this year. On immigration, big business and climate change, Julia Gillard is running to the right, while Barack Obama is staying to the left.

What explains this divergence in trajectories of two centre-left governments considered kissing cousins? The politics of each issue differ in the two countries. But the bigger story may be the fates of the two leaders.

The costs to Gillard of losing the election are unthinkable; winning at any cost is irresistible. For Obama, carnage for his Democrats in November's congressional elections may be bearable so long as it doesn't torpedo his chances for re-election in 2012.

The resulting policy divides across the Pacific are stark. Gillard doesn't want a big Australia and is seeking a Timor solution to asylum seekers. Obama is suing Arizona in support of illegal migrants and wants to build a path to legal status for more than 10 million of them.

The Gillard government caved in to the big miners on the super profits tax. Obama has imposed on Wall Street the biggest re-regulation of finance since the Depression. The Prime Minister is putting off an emissions trading scheme with a citizens assembly and by talking up green technology and energy efficiency. Obama pioneered green tech but is still insisting on an ETS even though Congress continues to deny him.

The conventional political analysis - the better your election chances, the more you can stick to your ideological guns - doesn't apply. Gillard's Labor is ahead in the polls, but Obama's unpopularity is plumbing historic depths.

The electoral contexts regarding immigration, big business and climate change in Australia and the US offer better clues for what is driving the divergence between the two governments.

In Australia, there are no votes in being soft on asylum seekers and talking of a population growth pause appeals to greens, xenophobes and outer urban battlers. In the US, Obama's 2008 campaign successfully brought America's largest ethnic minority, Latinos from Mexico and the rest of Latin America, into the Democrats' tent. Now Obama is courting them again with a federal lawsuit against a new Arizona law designed to find and deport illegal immigrants, almost all of whom enter the US across its massive porous border with Mexico.

Americans tend to view immigration more as a solution to ageing, skill shortages and deficits, whereas Australians see immigration as a problem for the environment, jobs and infrastructure.

The politics of big business are also quite different. There are economic merits to a mining tax to mitigate the "resource curse" of a two-speed economy. But the political imperative behind watering down the tax was clear - to assuage the concerns of average Australians that taking on the big miners would threaten their stock-market driven retirements.

Turning to climate change, walking away from "the greatest moral challenge of our time" irreparably hurt Rudd. But Gillard knows it makes more sense for small carbon-intensive Australia to follow rather than lead. Pumping up job-creating investments in clean energy, working to make businesses more energy efficient, and talking of building a national consensus is a holding pattern.

Obama wants the US to lead on climate change, but the domestic obstacles are immense. A new tax on carbon would risk electoral suicide. Obama's response is to play himself against Congress. Obama implored Congress to pass a major climate change bill. But he also threatened to use executive authority if it won't act. Senate Democrats have now put an indefinite hold on legislation, but Obama can be confident this won't have Rudd-like consequences for him.

Perhaps the key to understanding the gulf between Gillard's and Obama's pre-election strategies is the fates of both leaders. After the most unlikely triptych of Kevin 07's historic victory, Australia's remarkable escape from the global recession and Rudd being pushed overboard before the people had their say, the stakes for Gillard could not be higher. A poll loss would mortally wound her.

Pundits will cast November's elections as a midterm referendum on Obama. But history says a first midterm defeat doesn't always hurt the incumbent's bid for re-election two years later.

Defeats allow the President to pit himself as leading the country against an unpopular Congress. Obama may also secretly relish the prospect of a sweeping Republican victory in November for another reason. It could push the Republicans even further to the right in 2012, vacating the centre to Obama.

He can stick to his ideological guns and hope this will help him in 2012. Gillard doesn't have this luxury. Given the circumstances before the election, she has little choice but to run to the right.

Professor Geoffrey Garrett is chief executive of the US Studies Centre at the University of Sydney.

Professor Geoffrey Garrett

Dean, The Wharton School of the University of Pennsylvania

Geoffrey Garrett was the founding CEO of the US Studies Centre. Garrett is Dean, Reliance Professor of Management and Private Enterprise, and Professor of Management at the Wharton School of the University of Pennsylvania. Previously, he has been the Dean of the Business Schools at both the University of Sydney and the University of New South Wales.